Regulatory Alerts2023-06-19
Added
BRPD Circular No. 09: Interest/Profit Rate of Loan/Investment
The Bangladesh Bank establishes a monthly reference rate, the Bangladesh Bank Prime Lending Rate (BBPLR), based on the market interest rate of 182-day Treasury Bills, which banks must use to determine loan interest rates by adding a maximum spread of 3%. For agriculture and fisheries loans, the maximum spread is capped at 2%, while an additional supervision charge of up to 1% may be applied to SME and consumer loans. Islamic banks must apply these same spreads to determine profit rates, and all new loans must have interest rates fixed or variable (with changes every six months) agreed upon by the borrower prior to disbursement. This circular repeals previous directives on interest rates and becomes effective on July 1, 2023.
Topics
credit
islamic-finance
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